DWP work rules, overtime studied

the contract

Here are the key elements of the proposed contract with Department of Water and Power employees:

Number of workers covered: Approximately 8,700.

Term of contract: Four years.

Salary: A cost of living increase of 2 to 4 percent scheduled for mid-October will be delayed. Salaries will be frozen for three years.

Pensions: For new employees, maximum would be reduced from 100 percent to 80 percent, based on last three years of pay.

Employee health care: Retired employees will contribute 2 percent and active employees 1 percent, escalating to 4 percent for retirees and 2 percent for active workers in the third year.

Entry level salaries: Twenty-eight new entry level classifications to be created to close the gap of pay between DWP and city workers.

Outsourcing: The amount paid will be reduced from 10 percent to 5 percent of overtime costs.

Sick days: Employees will need a doctor’s note after three days.

Pension law suit: Resolves legal action brought by DWP pension board.

LOS ANGELES -- The City Council delved into the details of a proposed contract with the Department of Water and Power union on Friday, taking an unusually public look at the mechanics of the type of deal that is usually discussed behind closed doors.

While most of the City Council supports the deal negotiated by the administration of former Mayor Antonio Villaraigosa, Mayor Eric Garcetti is holding it up in a push for more concessions by the union.

With that in mind, Friday’s public hearing by two council committees was more a re-examination of the details rather than an effort to pressure the mayor into going along with the deal.

Garcetti and City Council President Herb Wesson are scheduled to meet Saturday night to discuss the contract to try to resolve differences. Wesson also has been meeting with Brian D’Arcy, business manager of IBEW Local 18.

“We will continue to meet to discuss this and, I expect, early next week will know one way or the other if we have a deal,” Wesson said. “I think at this point it’s up to the mayor.”

The current contract covering some 8,700 workers doesn’t expire until next year, but city and union officials are pushing to get a deal done before a cost-of-living increase of up to 4 percent takes effect Oct. 1.

The proposal would defer the cost-of-living adjustment and provide three years of zero increase in salaries. It also resolve a lawsuit filed by the DWP pension board as well as contains pension and health care reforms.

City officials sought to assure the two council committees that the contract provides more flexibility than at any time in DWP’s history and will help provide savings that can reduce projected rate increases as well as overtime and pension costs.

Still, a spokesman for the mayor said one of the key points is more reform to some of the work rules that lead to higher costs.

“Mayor Garcetti was elected to reform DWP and that’s what’s guiding him now,” said Garcetti spokesman Yusef Robb. “There are good things in this contract, but it’s not good enough. As the ratepayer advocate pointed out at today’s hearing, it falls short on work rules, and those are a huge cost driver at any organization, especially the DWP.”

Neither the Budget and Finance nor Energy and Environment committees made a recommendation on the contract, saying it needs to be worked through the Executive Employee Relations Committee on negotiations.

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Councilman Felipe Fuentes, chairman of the Energy and Environment Committee, said the next step is to give instructions to city negotiators.

“What I did learn is that the elected leadership has an opportunity to help the DWP lower its costs,” Fuentes said.

Councilman Mitch Englander said that is the main driver for him and residents of his northwest Valley district.

“My concern is how does this deal impact rates in my district,” Englander said. “We have the highest rates in the city because of the weather and the size of property. Every other month, when they open their DWP bills they fall out of their chairs.

“We might be competitive with other utilities, but the fact is, you can’t shop around. We are stuck with the DWP.”

Ratepayer advocate Fred Pickel spoke in favor of the contract in general terms, saying he wanted to make sure that certain provisions regarding a benchmark survey of the utility would not be impeded.

Pickel said the department was faced with strong challenges as it looks at an aging workforce, regulatory demands and the need to provide water and power for the city.

“We should not be critical of the overtime payments until we have a more careful study on why and how it is used,” Pickel said.

City Administrative Officer Miguel Santana noted there is a tipping point where it is less expensive to use overtime rather than hire new workers.

Santana said that was based on the pensions for new workers as well as other factors.

He also stressed how the proposal will help the city deal with the work rules that have been put in place over the years that drive up costs, such as the amount paid as a bonus to DWP employees who do work that is subject to outsourcing. Under the current agreement, they are to get overtime plus 10 percent additional hours. The new contract reduces that to 5 percent.

The outsourcing provision was flagged in a report by PA Consulting last year as an example of a work rule that added to the DWP’s costs.

City Controller Ron Galperin this week estimated there could be as many as 600 other work rules in effect that have been put in place over the years, but no study has been conducted to identify them all.